Lok Sabha

July 17, 2014

Sugata Bose speaks on Union Budget 2014 | Transcript

Mr. Chairman, Sir, I rise to offer a critique, a constructive one, of the central Budget presented to us exactly a week ago. We know that it is the hon. Finance Minister`s first Budget and he has been at some pains to explain that he had only 45 days to prepare it. So, we ought not to be too harsh in our assessment of his financial proposals as Shri Mulayam Singhji has been. An author had once sent his first manuscript to the legendary, Dr. Johnson for his comments. Upon reading it, Dr. Johnson had remarked that it contained some good things and some new things. But the good things in it were not new and the new things were not good. I am afraid, we must pass a similar verdict on the Finance Minister`s maiden Budget.

Far from being “the most comprehensive action plan” to achieve his goal of macro-economic stabilization, the Budget identifies a destination to be reached in three or four years without providing any clear roadmap on how to get there. Reduction of the fiscal deficit to 3 per cent of GDP by 2016-17 is a laudable, if ambitious, target. The Budget sets a direction all right, but is hopelessly vague about how we might navigate towards that goal. This Government, which is ideologically committed not to raise taxes, is silent about what it might do to widen the tax base – something that the preceding speaker also alluded to from the Treasury Benches – other than to stealthily deploy information technology. It is evident there will be spending cuts but that intention is cloaked in the decision to set up an Expenditure Management Commission. I hope the hon. Minister will spell out in his reply to this debate the status of this Commission and whether its recommendations would be binding on his Government.

If the principles of federalism and democracy appeal to him, the Finance Minister would do well to curb his impatience and not shut down the debate on the Goods and Services Tax. In principle, we are in favour of the introduction of a GST as we believe it will be good for small and medium scale enterprises across our vast and diverse land. However, this should not be done at the cost of the States` revenues. The concerns of States must be fully addressed and iron-clad constitutional guarantees provided by the Centre before taking the momentous step of introducing a GST. We suffered a lot by reducing CST a couple of years ago based on a false promise by the Centre.

Genuine cooperative federalism demands not just a fair basis of sharing tax revenues but a proper sharing of the powers of taxation by the States and the Centre. I understand that this Government admires Pundit Madan Mohan Malaviya after whom the Finance Minister has named one of his new schemes. So let me remind the Treasury Benches what that far-sighted patriot and Member of the Central Legislative Assembly had said on this matter. He told the Decentralisation Commission of 1908:

“The unitary form of Government which prevails at present should be converted into a federal system. The Provincial Governments should cease to be mere delegates of the Supreme Government, but should be made semi-independent Governments.”

These are Malaviyaji`s words, not mine. In his Lahore Congress Presidential Address of 1909, Malaviyaji had declared:
“What is needed is that the Government of India should require a reasonable amount of contribution to be made and should leave the rest of the revenues to be spent for Provincial purposes.”

Mr Chairman Sir, infrastructure, health and education must be the three pillers on which India should build its edifice of development over the next decade. I applaud the Government`s clear-eyed vision so far as investments in infrastructure is concerned. The allocation for roads and power stations, airports and seaports are impressive and probably the best that could be done in the present fiscal situation. Government outlays will not be enough and we will have to achieve back our economic stability in order to attract global funds to meet our infrastructure needs.

I am dismayed however by the Government`s myopia in not seeing that a healthy and educated populace is imperative for sustained economic growth and development. The Finance Minister has said in a newspaper interview that you referred to yesterday Mr Chairman that he will not scrap any social stat sector programmes. But that is not enough. The country is facing a public health crisis. And yet, a 4.2 % nominal increase in the allocation for the health department masks a 4.4% decrease in real terms if any one adjusts for the 8.6% inflation we have had over the last financial year.

The biggest disappointment of the Budget lies in the miserliness shown towards education, especially primary and secondary school education. The manifesto of the ruling party had proclaimed that spending on education would be raised from 3% to 6% of GDP; that is the norm in much of Asia and ought to be a matter of national consensus in India. Where is the Finance Minister`s roadmap towards achieving that objective of raising it from 3% to 6% of GDP? The Budget has managed to put the country on reverse gear in the education front with a decrease in real allocation of 3.2% in this sector, so vital for the future of the young generation. Pandit Malvya would not have been pleased with this sorry state of affairs even if you have provided Rs 500 crores in New Teachers Training in his name.

On the face of it higher education fares a bit better than school education in the Government`s scale of priorities with the announcement of new IITs, IIMs and one Humanities Centre in the name of Jayprakash Narayan. So we can expect nearly Rs 50 crore to be spent on brick and mortar in 11 new locations this year. But has adequate attention been given to the requirement of human resources including faculty for these new educational institutions? And is this the best strategy to achieve broad access and excellence in Higher Education? Why not invest similar amounts in 10 of the most promising colleges and universities, both Central and State, that may have gone into some decline in recent years but can be turned around through visionary leadership and judicious strategic investment? This is precisely what China has done to at least half a dozen of their universities to break into the league of world`s top hundred.

And I would like to put in an earnest plea to hon. Finance Minister not to misuse the name university, because a university is something universal. By all means set up a sports academy in Manipur but call it what it is. There are going to be polytechnics, training collages, that is fine, and also you can have horticultural institutes but to call them universities is to make a mockery of the idea of a university. I teach at Harvard, so I am very much conscious about the purity of the term university.

I am sad of course that one of the horticultural universities the Finance Minister has proposed, I would name them institutes, is not being set up in Bengal. If I could invite Shri Arun Jaitley to my constituency, I am sure that he would be convinced that the most delicious fruits and vegetables and beautiful flowers too comes from Baruipur, Sonarpur and Bhangar, any of which can serve as wonderful location for an innovative horticultural institute. I can understand that Rs 100 crore would be a sensible amount to allocate for a single institution of this kind. However, flagship nationwide schemes featuring in the Government`s agenda, announced with much fanfare needs to be backed by significant resources and call for much larger outlays.

It is a shame, as the Finance Minister said in his Budget speech, that the apathy towards the girl child is still rampant in many parts of the country. It is a bigger shame and a sign of greater apathy that he has set aside a paltry Rs 100 crore for the Beti Bachao Beti Padao Yojana. Mamata Banerjee’s Kanyashree scheme has the State budgetary support to the tune of Rs 1000 crore. The provision of Rs 100 crore for the modernization of madrassahs is a mere pittance. I call upon the Finance Minister in his reply to increase each of these allocations ten-fold straight away to show a modicum of respect to our women and minorities. There is yet another Rs 100 crore set aside for ghat development and riverfront beautification of seven cities from Kedarnath to Patna. I can only say that the Ganga does not stop flowing at Patna.

So we need debt relief in Bengal, we need an enhancement of royalties in coal in Bengal and we need justice to be done to the eastern region of the country. I will conclude shortly Chairman. I want to say a final word about a budgetary item of symbolic value. I refer to allocation of Rs 200 crore to cast the Ironman of India in an iron mould. I wonder what Sardar Ballavbhai Patel would have made of it. I have a sneaking suspicion that he the hero of the Bardouli Satyagraha would have preferred to donate that amount towards rural development that has suffered a budgetary cut of 3.2% in real terms and his even greater elder brother Vitthal bhai Patel who led the flag of freedom aloft in Europe which Subhas Chandra Bose in the early 1930s would probably have excoriated the Government for wasteful expenditure in the same way as he held the British accountable when he spoke eloquently in these meetings as a Member and then the President of the Central Legislative Assembly. To honour the Patel Brothers and other noble figures of that generation including Swami Vivekananda, we need to follow their ideals of honesty and integrity, service and sacrifice, not just worship them in iron and stone. We would of course love to have a beautiful statue of Swami Vivekananda but we know that what is huge is not great and we want reasonable expenses.

In conclusion, my final word Mr Chairman Sir, is that in this time of rampant food inflation, we must be grateful to our Finance Minister for presenting a prosaic budget but we Bengalis are incorrigible. It is one of our poets who had bid farewell to poetry as in the kingdom of hunger the world had turned prosaic and even the full moon looked like a flaming roti but he said in poetry.

Kobita tomay dilam ajke chhuti
Khudar rajye prithibi goddomoy
Purnimar channd jeno jholsano roti

I appeal to you, our people are poor. Whatever your expenditure management commission says, do not cut the food subsidy; target the fertilizer subsidy. Many of my colleagues have gone to the Central Assembly for lunch at subsidized rates. One third of my country is poor. One third of the world`s poor live in India, so your first task hon. Finance Minister, I would submit through the Chairman, is to ensure that the poor and the obscure of our country has two square meals a day.